Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector
The Chinese banking sector has undergone noteworthy financial reforms, which significantly metamorphosed the banking system. This article seeks to examine the determinants of the profitability of the Chinese banking sector. The empirical analysis is confined to the four State Owned Commercial Banks...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Routledge
2009
|
| Online Access: | http://psasir.upm.edu.my/id/eprint/56388/ http://psasir.upm.edu.my/id/eprint/56388/1/Determinants%20of%20bank%20profitability%20in%20a%20developing%20economy%20empirical%20evidence%20from%20the%20China%20banking%20sector.pdf |
| _version_ | 1848853069797785600 |
|---|---|
| author | Sufian, Fadzlan |
| author_facet | Sufian, Fadzlan |
| author_sort | Sufian, Fadzlan |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | The Chinese banking sector has undergone noteworthy financial reforms, which significantly metamorphosed the banking system. This article seeks to examine the determinants of the profitability of the Chinese banking sector. The empirical analysis is confined to the four State Owned Commercial Banks (SOCBs) and the 12 Joint Stock Commercial Banks (JSCBs) during the postreform period of 2000–2007. The empirical findings of this study suggest that size, credit risk, and capitalization are positively related to the profitability of China banks, whereas liquidity, overhead costs, and network embeddedness have negative impacts. However, the impact of liquidity is not uniform across bank types. We find that the SOCBs with higher level of liquidity tend to be relatively more profitable, which could be vindicated by the significant amount of lending to the State Owned Enterprises. The impact of economic growth and inflation are always positive whether we examine the SOCB or the JSCB. |
| first_indexed | 2025-11-15T10:48:07Z |
| format | Article |
| id | upm-56388 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T10:48:07Z |
| publishDate | 2009 |
| publisher | Routledge |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-563882017-07-31T09:13:05Z http://psasir.upm.edu.my/id/eprint/56388/ Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector Sufian, Fadzlan The Chinese banking sector has undergone noteworthy financial reforms, which significantly metamorphosed the banking system. This article seeks to examine the determinants of the profitability of the Chinese banking sector. The empirical analysis is confined to the four State Owned Commercial Banks (SOCBs) and the 12 Joint Stock Commercial Banks (JSCBs) during the postreform period of 2000–2007. The empirical findings of this study suggest that size, credit risk, and capitalization are positively related to the profitability of China banks, whereas liquidity, overhead costs, and network embeddedness have negative impacts. However, the impact of liquidity is not uniform across bank types. We find that the SOCBs with higher level of liquidity tend to be relatively more profitable, which could be vindicated by the significant amount of lending to the State Owned Enterprises. The impact of economic growth and inflation are always positive whether we examine the SOCB or the JSCB. Routledge 2009 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/56388/1/Determinants%20of%20bank%20profitability%20in%20a%20developing%20economy%20empirical%20evidence%20from%20the%20China%20banking%20sector.pdf Sufian, Fadzlan (2009) Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector. Journal of Asia-Pacific Business, 10 (4). pp. 281-307. ISSN 1059-9231; ESSN: 1528-6940 http://www.tandfonline.com/doi/abs/10.1080/10599230903340205 10.1080/10599230903340205 |
| spellingShingle | Sufian, Fadzlan Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector |
| title | Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector |
| title_full | Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector |
| title_fullStr | Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector |
| title_full_unstemmed | Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector |
| title_short | Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector |
| title_sort | determinants of bank profitability in a developing economy: empirical evidence from the china banking sector |
| url | http://psasir.upm.edu.my/id/eprint/56388/ http://psasir.upm.edu.my/id/eprint/56388/ http://psasir.upm.edu.my/id/eprint/56388/ http://psasir.upm.edu.my/id/eprint/56388/1/Determinants%20of%20bank%20profitability%20in%20a%20developing%20economy%20empirical%20evidence%20from%20the%20China%20banking%20sector.pdf |